Oil prices steady on reserve supply talks

Thursday, March 29, 2012 - 02:30

March 29 - French Prime Minister Francois Fillon says there is high probability that Europe and the United States will strike a deal on the release of strategic oil reserves in a bid to bring down prices and prevent a shortage. Hayley Platt reports.

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Rising oil prices have become a major headache for politicians around the world.
Brent Crude has risen 15 percent this year and was 124 dollars a barrel on Thursday.
Now France has joined the U.S. and Britain in talks to release strategic reserves in a bid to cut oil prices and prevent a shortage.
French Prime Minister Francois Fillion says he's hopeful a deal will be done.
SOUNDBITE: French Prime Minister Francois Fillion, saying (French):
"If we reach an agreement with the other developed countries, we can by using our stocks push oil prices down during a limited period. This is a way to face the crisis which is largely due to the situation in Iran today. But you can't expect miracles in the lowering of the petrol prices. But it can allow us to stabilize the price to make it a bit lower for a few months."
Saudi Arabia - one of the world's top oil exporter's - said they also wanted to see prices reduced and they were ready to meet any gap in supplies if needed.
Simon Wardell is an oil analyst from IHS Global Insight.
SOUNDBITE: Simon Wardell, Senior Oil Analyst, IHS Global Insight, saying (English):
"It would only take a disruption from Iran the amount they export roughly 2 million barrels a day exported from Iran, if that goes off the market then yes we really do have some issues with trying to meet that supply.
Global supplies are already down by more than a million barrels a day thanks to civil unrest, adverse weather conditions and technical glitches in a number of countries.
Saudi Arabia is the only producer with enough spare oil to help should there be a major shortfall.
The U.S. in particular is keen to see prices come down as President Obama campaigns for re-election.
U.S. crude fell slightly on Thursday to 105 dollars a barrel - but there's widespread anger in America over soaring prices and analysts say it's choking economic growth.
SOUNDBITE: Simon Wardell, Senior Oil Analyst, IHS Global Insight, saying (English):
"The global economy is still recovering and these sorts of prices knock that back a bit, so certainly we should see prices lower."
Any decision to release extra reserves would need the approval of The International Energy Agency.
It last opened emergency reserves during Libya's civil war.
And says the current situation isn't bad enough to justify extra supplies yet.
That may change as a ban by the European Union on Iranian crude takes effect on July 1.
Hayley Platt, Reuters.